Andy Grove, former Intel CEO and Silicon Valley icon, dies at 79

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Andy Grove inside The Grove Foundation office in Los Altos, Calif. on Tuesday, September 27, 2011. Rather than disappearing to a gilded retirement, former Intel CEO Andy Grove has re-invented himself as a medical activist, urging the nation's top doctors to model their research after the computer industry - fast, efficient and willing to turn on a dime. (Nhat V. Meyer/Mercury News)

Andy Grove inside The Grove Foundation office in Los Altos, Calif. on Tuesday, September 27, 2011. Rather than disappearing to a gilded retirement, former Intel CEO Andy Grove has re-invented himself as a medical activist, urging the nation's top doctors to model their research after the computer industry - fast, efficient and willing to turn on a dime. (Nhat V. Meyer/Mercury News)

Andy Grove, the brilliant Hungarian-born former chief executive and chairman of chip-making colossus Intel, and one of Silicon Valley’s most revered business leaders, died Monday at the age of 79.

During his three decades with the Santa Clara corporation, the gruff and demanding Grove helped mold Intel into a multibillion-dollar Goliath and the world’s biggest semiconductor company. Along the way, he also became a prolific author, donated millions of dollars to charity and was lavished with awards, including being named Time magazine’s Man of the Year.

“Andy made the impossible happen, time and again, and inspired generations of technologists, entrepreneurs and business leaders,” said Intel CEO Brian Krzanich.

“Andy Grove was one of the giants of the technology world. He loved our country and epitomized America at its best. Rest in peace,” tweeted Apple CEO Tim Cook.

News hit hard at the Lion & Compass, the upscale Sunnyvale restaurant where Intel executives have for years held regular business meetings.

“Noooo. There goes a piece of history,” maitre d’ Kim Martin said somberly Monday evening when informed of Grove’s death.

For more than a decade, Martin served as Grove’s exclusive waiter (Chivas on the rocks was his drink of choice) in the restaurant’s private dining room known as the library. “That’s where all the deals were made. Sometimes I wasn’t even allowed in the room,” Martin said.

There was no immediate announcement of plans for a memorial service.

Grove’s achievements were particularly noteworthy given his humble beginnings.

Born Andras Grof in Budapest, Hungary, on Sept. 2, 1936 — the only child in a Jewish family of decidedly modest means — he endured the repressive Nazis and subsequent Soviet occupations of that country and sometimes had to conceal his ancestry to avoid persecution.

His mother’s dream of becoming a concert pianist was dashed after she was denied admission to a music academy because she was Jewish, according to Grove’s autobiography, “Swimming Across,” and he strongly implied that during World War II she was raped by Russian soldiers. In addition, he said his father, a partner in a dairy business, was forced during the war to labor for the Soviets on the Russian front, where he was treated cruelly.

The repressive atmosphere hindered Grove’s ambitions, too. He had longed to become a journalist and for a while penned articles for a local newspaper. But after his uncle was arrested on vague charges and Grove’s father was accused of assisting “bourgeois elements,” Grove’s newspaper editor refused to publish any more of his writings.

Grove, who suffered permanent hearing damage after developing scarlet fever at age 4, was awkward with girls and admittedly pudgy. He recalled in his book how other kids called him “fatso” and usually picked him last for soccer matches because he wasn’t athletic.

But he took pleasure in more intellectual pursuits, developing a love of opera and earning high marks at school. Grove fled to Austria at the age of 20 and, with $20 in his pocket, emigrated to the United States, where he changed his name from Grof to Grove, moved in with relatives and was accepted at City College of New York. In 1958, he married Eva Kastan, another Hungarian refugee he met at a summer resort where they both worked and with whom he later had two daughters.

Finishing City College in 1960 at the top of his class with a bachelor’s degree in chemical engineering, he entered graduate school at UC Berkeley and arranged for his parents to leave Hungary and join him in California. After receiving a doctorate degree in chemical engineering in 1963, Grove landed a job with Silicon Valley chip pioneer Fairchild Semiconductor, where he became assistant director of research and development in 1967.

But his career really took off the next year when he left Fairchild to become director of operations at Intel, which had been co-founded that year by two other Fairchild expatriates, Gordon Moore and Bob Noyce.

David Laws, the semiconductor curator at the Computer History Museum, worked at Fairchild where Grove’s team developed the foundation of the metal oxide semiconductor chip that created Silicon Valley.

“At Intel, Andy not only got MOS to work but turned it into high volume production” said Laws. “And that’s the story of Silicon Valley. Without MOS, we certainly wouldn’t be at a billion transistors on a chip,” he said.

Back then, Intel was hinging its commercial hopes on developing memory chips, so called because they store information. But launching a new business was stressful. Intel’s official history noted that employees sometimes flew into screaming fits, and one manager grew so angry about the late production of a report, he chased an engineer through the building throwing pencils at him.

“I was absolutely petrified we would fail,” Grove was quoted as saying in the corporate account, adding that he took extreme measures to create the impression the chipmaker was viable. When customers toured the business, according to the account, Grove said he “ran around moving our people from one place in the building to another so it would look busier,” and the employees were given several hats to wear to make the workforce seem bigger than it actually was.

He became Intel’s president in 1979, CEO in 1987 and chairman in 1997. Along the way, Grove earned a reputation as a demanding taskmaster. Named one of America’s toughest bosses by Fortune magazine, he could be exceedingly testy with his underlings — especially if they failed to show up at work by 8 a.m. or were sloppy in their presentations — reportedly barking at employees at times and using alarm clocks to keep meetings on track.

“Andy relentlessly upped the pace of Intel,” Paul Saffo, Silicon Valley forecaster, said Monday. “He’s the guy who built it into the titan of industry it became. He did it by a unique mix of vision, and velocity. … You have to flee into the future as fast as you can and the moment you slow down, you’re toast.”

Described as “brutally honest” with others by Silicon Valley marketing guru Regis McKenna, Grove’s gruff manner could rub sensitive people the wrong way. But his employees felt comfortable enough around Grove — who loved the music of John Denver and the rock group Queen — to fire rubberbands at him as he strolled through the hallways and loudly razz him when he once nearly knocked some video equipment off a table.

Widely regarded as a brilliant problem solver, Grove became close with Apple co-founder Steve Jobs, who viewed the Intel CEO as a mentor and one of his heroes. But in “Only the Paranoid Survive,” a book Grove published in 1996, he confessed to obsessively fretting about his business.

“I worry about products getting screwed up, and I worry about products getting introduced prematurely,” he wrote. “I worry about factories not performing well, and I worry about having too many factories. I worry about hiring the right people, and I worry about morale slacking off. And, of course, I worry about competitors.”

But Grove said he mostly anguished over what he called “strategic inflection points,” where Intel went through fundamental and sometimes painful changes. One such transition occurred during the mid-1980s, when intense Japanese competition forced the company to shift from making memory chips to microprocessors. Shortly after that, a sharp and unexpected drop in business caused it to close seven factories, jettison several businesses and cut its workforce by a third.

“There were dozens and dozens of companies in this valley producing personal computers,” Grove said of those days in a later interview with this newspaper. “So the collision came, and there was a huge shakeout. We went from a period of time when everybody was begging us for parts to, all of a sudden, we were begging them for orders, and all that happened in a period of 30 days.”

But Grove persevered. In 1997, he was named Time magazine’s Man of the Year. And from the day he became CEO until he stepped down to be replaced by Craig Barrett in 1998, Intel’s annual sales increased from $1.9 billion to $25 billion, and its profit ballooned from $248 million to $6.9 billion.

Grove — who earned a slew of business, engineering and other awards over his career — relinquished his position as chairman in 2005 but remained active in the company as a senior adviser while pursuing other interests.

He continued to indulge his passion for writing, cranking out technical papers, magazine articles, newspaper columns and books. He also advocated for fuel-efficient vehicles to cut the nation’s dependence on foreign oil and reduce greenhouse gas emissions. But the subject of health became a special concern.

Diagnosed in 1995 with prostate cancer — which later went into remission — and in 2000 with Parkinson’s disease, Grove contributed tens of millions of dollars to medical research and urged speedier regulatory approval of vitally needed therapies. That provoked rebukes from some critics who said he didn’t understand the complexities of drug making.

But in a 2011 interview with this newspaper, Grove brushed off the barbs.

“Maybe I’m Don Quixote,” he said, then 75 and fidgeting from the increasingly debilitating effects of Parkinson’s. “But the best treatment I can get is to be energetic and commit to something.”

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